Bloomberg News

Euro Strengthens Amid Optimism That Greece Will Pass Budget Cuts

June 28, 2011

June 28 (Bloomberg) -- The euro gained against the dollar before Greek lawmakers vote on budget cuts needed to prevent the currency union’s first default.

The 17-nation currency advanced versus against the majority of its most-traded counterparts after Greek Prime Minister George Papandreou called on lawmakers to obey their “patriotic conscience” and back tougher austerity measures, as they began to debate a five-year budget plan yesterday.

“I don’t imagine that we’re going to see any momentum that would take the euro out of this range, given that this vote is so crucial and so imminent,” said Jane Foley, a senior currency strategist at Rabobank International in London. “ If the votes aren’t successful, it could be Armageddon day for the euro zone. Therefore there is this underlying assumption that the votes will get passed.”

The euro advanced 0.2 percent to $1.4317 as of 8:46 a.m. in London, after earlier slipping as much as 0.2 percent. The common currency was little changed at 115.64. The dollar bought 80.78 yen from 80.89 yesterday, when it reached 80.98, the highest level since June 16.

--Editors: Keith Campbell, Matthew Brown.

To contact the reporter on this story: Lucy Meakin in London at lmeakin1@bloomberg.net.

To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net.


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